Trading The Easing Cycle

We have already commented a lot on how central banks across the globe are scrambling to contain the contagion of deflation, which as we correctly pointed out nearly 2 months before mainstream financial media rode on that story, that is careening wildly out of control thanks to the material and psychological impacts low oil and gas prices have on economies. However, we have yet to espouse a particular strategy to profit off this monetary policy easing cycle. A lot of money can potentially be made in this light - a quick look behind our shoulders at the various QE programs by the Fed should paint a color picture, one that financial markets in particular love. As such, we present sage advice from Citi's Matt King on how to trade the "Biggest Bubble Of All" - that of central banking exuberance. 

Now that 2015 is set to be the year with the greatest amount of central bank intervention, it means there will be virtually no supply of securities to buy. So as a result, existing securities will keep getting bid up like "a hot potato" pushing existing P/E multiples to higher than already obscene levels. While we don't fully agree with all that is said, it is nonetheless beneficial to know that you too can profit from this policy cycle.


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The topic of whether or not this is the world's biggest asset bubble has become moot, and even such bastions of credible, "non-fringe" though as Citigroup no longer pretend that the S&P at 2100 is anything but the biggest, and final as its existience is contingent on the credibility of central banks themselves, asset bubble.

We now live in a world of:

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but,

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If you summarized...

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However, to loosely quote Chuck Prince, the central bank music may be getting fainter, but it is still playing so the dancing must continue until the bitter end.

So how should one, according to Citi, trade the biggest equity bubble of all time?

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Confused? Don't worry, just call your nearest Citigroup sales rep. Don't have one? Then here is King's reco for everone else:

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And... 

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But the best news for everyone sick and tired of the most ridiculous experiment in central-planning and market manipulation in history:

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Until then, happy trading!